Bloomberg News

Canadian Natural Gas Slips on Record U.S. Inventories

April 24, 2012

Canadian natural gas declined amid analyst estimates that stockpiles of the fuel in the U.S. grew by more than the five-year average.

Alberta gas fell 2.3 percent. U.S. stockpiles probably increased 51 billion cubic feet last week, the median of 11 analyst estimates compiled by Bloomberg. Estimates ranged from gains of 40 billion to 64 billion cubic feet. Inventories have risen an average 47 billion cubic feet in the same week over the past five years, according to the Energy Department.

“It’s as bearish as can be,” said Gordy Elliott, a risk- management specialist with INTL FC Stone LLC in St. Louis Park, Minnesota. “We could see storage full this summer.”

Alberta gas for May delivery declined 3.5 cents to C$1.50 a gigajoule ($1.44 per million British thermal units) as of 3:45 p.m. New York time on NGX, a Canadian Internet market.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp. (TRP)’s Alberta system. NGX gas is down 48 percent this year.

Natural gas for May delivery on the New York Mercantile Exchange slipped 3.2 cents to settle at $1.975 per million Btu.

Gas for prompt delivery gained amid forecasts of colder- than-normal weather in the U.S. Midwest, the biggest consuming region for Canada’s gas exports. Temperatures in Chicago will drop to 37 degrees Fahrenheit (3 Celsius) April 27, 9 degrees below seasonal norms, according to AccuWeather Inc.

Spot gas at the Alliance delivery point near Chicago gained 7.25 cents, or 3.6 percent, to $2.1078 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day from western Canada.

Spot Prices

At the Kingsgate point on the border of Idaho and British Columbia, gas advanced 9.14 cents, or 5.2 percent, to $1.8642 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices rose 10.57 cents, or 5.7 percent, to $1.9644.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.7 billion cubic feet, 136 million below target.

Gas was flowing at a daily rate of 2.16 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 2.23 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 939 million cubic feet. The system was forecast to carry 1.71 billion cubic feet today, or 65 percent of its capacity of 2.65 billion.

The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 3.25 billion cubic feet at 2:35 p.m.

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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